FIVE REASONS AN INSURANCE COMPANY MAY REFUSE TO PAY YOUR MOTOR INSURANCE CLAIMS

 

Many commercial drivers believe that Insurance Companies are “thieves” or “fraudsters” who use paper work to “collect” their monies and refuse to pay them when they are in need. Is this really the case? Do the drivers have good reasons for having this perception about insurance? This article will explore some of the commonest reasons insurance companies refuse to pay insurance claims when their clients have accidents.

 

I have been an insurance agent since 2018 and my experiences tell me that, the National Insurance Commission and the Insurance Companies need to do more to educate especially commercial drivers on insurance.

 

I do not intend to write in an academic style so that this will be readable and understandable to many people. Therefore, I will try to keep it very short and simple.

 

I will list the reasons, explain them and attempt to offer a solution where necessary.

 

Fake Insurance – Many people are driving around with fake insurance stickers which they usually buy from some dubious agents who try to outsmart the system. In my experience as an Insurance agent, I have realized that most Taxi and Trotro drivers always try to bargain on insurance premiums. They don’t only bargain but when you refuse to sell to them at the price they have quoted, they will go and buy from another agent and come and show you their sticker. These Agents know, that the commercial drivers are not really looking for genuine insurance but are just looking for a sticker to avoid Police harassments. Therefore, they are ready to help them get a sticker at a cheaper cost. They make the work difficult for the genuine agents and also put the lives of many in danger. The NIC has introduced a short code to check if an insurance is fake or genuine but this short code has not been popularized enough. Even some Police officers still do not know about this short code. Be rest assured, if your insurance is fake, no insurance company will pay you any claim if you should get involved in an accident.

 

How do I know if my insurance is fake?  You just need to dial *920*57# then you input your car number. This will tell you whether your insurance is active, or inactive.  It is also advisable, that passengers use this service to check the validity of the insurance of any passenger’s car before they get on board.

 

Unqualified Driver – Another important thing that every insurance company will check before paying claims is whether the driver who was driving at the time of the incidence, had a valid driving license. When you give your car to the washing bay attendant to drive and it gets crushed, not even a comprehensive insurance will save you. When you allow a mechanic, who has no driving license to drive your car and it gets crushed, you are in trouble. The long and short of it is that, if you have not seen a valid driving license of any person, don’t hand over your car keys to the person. An accident can happen in 1 second at the time you least expected it. The policy is that, an insurance company will not pay if the driver was not qualified at the time of incidence.

 

Also under this point is the challenge of Fake Driving Licenses. Many commercial drivers, especially, go through middle men to get a driving license. When the license of the person cannot be verified by the DVLA, that in itself is an offense. The holder of such a license is also seen as an unqualified driver and an insurance company will deny payment on that basis.

 

Overloading of Passengers – The number of passengers a car can carry is always written in the road worthy booklet. It is this number which the insurance company uses to calculate the insurance premium for the car. The rule is that you can pick less or equal to that number of passengers. The moment you exceed that number, you have given the insurance company a reason to deny payment of your claims. Example, most people use saloon cars to carry school children to school. The Saloon car may have a capacity of 5 persons. But because the children have smaller bodies, they may carry 10 children. When you do this, you are putting the lives of the children in great danger. In the event of any accident, not matter how sad it will be, the insurance company will refuse to pay any claims because you have breached the rules of engagement.  In the case of children, the parents may succeed for an action against the driver, if they themselves had not consented to the overloading. But when would be the use of a successful action when the driver is a poor man who has nothing substantial to be sold to settle the judgement debt? Prevention is better than cure.

 

Road worthy renewal – When you buy an insurance package for your car, you have also undertaken that your car will be in compliance with road worthiness. This means, you should ensure you renew your road worth promptly as required by law. Anytime your road worthy expires, it places you in danger of loosing your insurance claims should anything happen. Ensure you mark the dates for renewal in your calendar so you don’t forget to renew at the right time.

 

Car Racing – The regular motor insurance policies we usually buy for our cars are for low risk users. It is not for high-risk activities such as car racing. Therefore if you engage your car in car racing without having a car racing insurance, then your insurance company will deny paying you any claims that will arise out of such an activity.

 

 

RICHARD AMARH, ESQ.

niiamarh@gmail.com

 

The write is an insurance underwriter and a lawyer.